FINLEY LINES JOINT PROTECTIVE BOARD UNIT 200, BROTHERHOOD RAILWAY CARMEN, A DIVISION OF TRANSPORTATION COMMUNICATIONS UNION; Jack H. Wright, Plaintiffs-Appellants, v. NORFOLK SOUTHERN CORPORATION; Norfolk Southern Railway Company, Defendants-Appellees.
No. 96-1517.
United States Court of Appeals, Fourth Circuit.
Argued March 5, 1997. Decided April 3, 1997.
108 F.3d 993
III.
Winstead further argues that he should not be liable for FUTA taxes because he did not pay sufficient wages to the day laborers to come within the terms of FUTA. Section 3306(a)(2) of the Internal Revenue Code identifies employers of agricultural labor subject to FUTA taxes as follows:
Agricultural labor.-In the case of agricultural labor, the term “employer” means, with respect to any calendar year, any person who-
(A) During any calendar quarter in the calendar year or the preceding calendar year paid wages of $20,000 or more for agricultural labor.
Winstead contends that he “did not pay $20,000 or more of wages during any calendar quarter for 1980 and 1981,” and that the district court made no factual findings regarding the amount of wages paid in those years. In a tax refund action, however, the IRS‘s assessment of taxes is presumed correct, and the taxpayer bears the burden of proving otherwise. United States v. Janis, 428 U.S. 433, 440, 96 S.Ct. 3021, 3025, 49 L.Ed.2d 1046 (1976). In this case, the IRS‘s assessment of FUTA taxes indicated that Winstead met the prerequisite of section 3306(a)(2) for the years in question. Winstead has pointed to no evidence that the IRS‘s assessment was incorrect, and his conclusory allegations are not sufficient to create a factual dispute.
IV.
For the foregoing reasons we affirm the judgment of the district court.
AFFIRMED.
ARGUED: Newton G. McCoy, C. Marshall Friedman, P.C., St. Louis, Missouri, for Appellants. Frank Huger Gibbes, III, Gibbes, Gallivan & White, Greenville, South Carolina, for Appellees. ON BRIEF: C. Marshall Friedman, Kenneth E. Rudd, C. Marshall Friedman, P.C., St. Louis, Missouri; Susan Ingles, Greenville, South Carolina, for Appellants. Stephanie H. Burton, Gibbes, Gallivan & White, Greenville, South Carolina; Mark D. Perreault, Norfolk Southern Corporation, Norfolk, Virginia, for Appellees.
Before RUSSELL, MURNAGHAN, and MOTZ, Circuit Judges.
Reversed by published opinion. Judge MOTZ wrote the opinion, in which Judge RUSSELL and Judge MURNAGHAN joined.
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
This is an appeal from an order vacating a notice of voluntary dismissal. Because at the time plaintiffs filed the notice, defendants
I.
On November 22, 1995, Finley Lines Joint Protective Board Unit 200, Brotherhood Railway Carmen and J.H. Wright (collectively Finley) filed a complaint in the United States District Court for the Eastern District of Tennessee alleging that the Norfolk Southern Corporation and Norfolk Southern Railway Company (collectively Norfolk) had violated certain provisions of the Railway Labor Act,
Finley then moved to enlarge the time to respond to Norfolk‘s motion to dismiss. Norfolk opposed the motion and on January 25, 1996, the district court denied it. The next day, January 26, 1996, Finley filed a notice of voluntary dismissal without prejudice pursuant to
On February 5, 1996, Norfolk moved to vacate Finley‘s notice of voluntary dismissal, arguing that Finley was not entitled to voluntarily dismiss the case pursuant to Rule 41 because Norfolk‘s motion to dismiss and supporting affidavits constituted a motion for summary judgment under
Finley appeals, asserting that the district court erred in both rulings. Our conclusion that the district court erred in granting the motion to vacate Finley‘s notice of voluntary dismissal without prejudice disposes of the need, or ability, to review its decision as to Norfolk‘s motion to dismiss.
Determination of the critical issue presented in this appeal-whether the district court properly vacated Finley‘s notice of voluntary dismissal-depends upon the proper interpretation and interrelation of Rule 41(a)(1)(i) and Rule 12(b)(6).
Norfolk recognizes these controlling principles and concedes that it neither answered the complaint nor moved for summary judgment prior to January 26, 1996, the date Finley filed its notice of voluntary dismissal. Nevertheless, Norfolk asserts that Finley had no right to dismiss under Rule 41(a)(1)(i) because Norfolk‘s December 5, 1995 motion to dismiss was supported by materials outside the complaint and thus must be treated as a motion for summary judgment under Rule 12(b)(6).
Norfolk maintains a Rule 12(b)(6) motion to dismiss supported by outside materials is converted into a motion for summary judgment at the time “that it was served.” Brief of Appellees at 17. There is some limited support for this theory. See Yosef v. Passamaquoddy Tribe, 876 F.2d 283, 286 (2d Cir. 1989) (possibly dicta-because it is unclear from the opinion whether the district court actually considered extraneous materials attached to the motion to dismiss and so converted the motion to one for summary judgment prior to the plaintiff‘s filing the Rule 41(a)(1)(i) notice); Exxon Corp. v. Maryland Cas. Co., 599 F.2d 659, 661 (5th Cir.1979) (same); Kurkowski v. Volcker, 819 F.2d 201, 203 (8th Cir.1987) (alternative holding); Tedeschi v. Barney, 95 F.R.D. 182, 183 (S.D.N.Y.1982) (alternative holding).
We cannot embrace this interpretation, however, because it is at odds with the language and intent of Rule 12(b)(6), our decision in Wilson-Cook Med. Inc. v. Wilson, 942 F.2d 247 (4th Cir.1991), and the better reasoned out-of-circuit precedent.
First, and most obviously, the plain language of the rule does not permit conversion upon service. Rule 12(b)(6) does not provide that a motion to dismiss supported by materials outside the pleadings shall be treated as one for summary judgment when “filed” with the court or when “served” on a party. Rather, the rule expressly states that a motion to dismiss supported by such materials “shall be treated” as a summary judgment motion only when the materials are “presented to and not excluded by the district court.”
Moreover, holding as Norfolk urges would undermine one of the critical features of the conversion provision of Rule 12(b)(6). If a motion to dismiss supported by extraneous materials automatically converts to a summary judgment motion upon service, the discretion Rule 12(b)(6) vests in the district court to determine whether or not to “exclude” matters outside the pleadings would be eliminated. Id. See e.g., Wilson-Cook, 942 F.2d at 247; Keeler v. Mayor & City Council of Cumberland, 928 F.Supp. 591, 594 (D.Md. 1996); Walker v. Tyler County Comm‘n, 886 F.Supp. 540, 542 n. 1 (N.D.W.Va.1995).
Norfolk‘s suggestion also conflicts with Rule 12(b)(6)‘s requirement that a court provide parties with notice of its intention to treat a motion to dismiss as one for summary judgment and “a reasonable opportunity to present all material made pertinent to such a motion by Rule 56.”
Furthermore, Norfolk‘s conversion upon service rule is at odds with our recent holding in Wilson-Cook, 942 F.2d 247. In that case, the defendant contended that its Rule 12(b)(6) motion had been converted into a summary judgment motion preventing the plaintiff from voluntarily dismissing without prejudice because the district court had not expressly rejected materials outside the pleadings submitted in support of the motion. We rejected this argument. We concluded that although the district court had not expressly excluded the materials, it had refused to consider them in ruling on the motion and so “effectively excluded” them. Id. at 252. Thus, the Wilson-Cook holding accords with our conclusion here that no conversion occurs unless and until a court indicates that it will consider the extraneous material. Conversely, the Wilson-Cook holding would not have been possible if we were to adopt Norfolk‘s theory that a speaking Rule 12(b)(6) motion is converted into a summary judgment motion when served.
Additionally, our interpretation of Rule 12(b)(6) accords with the better reasoned view that “conversion takes place at the discretion of the court, and at the time the court affirmatively decides not to exclude extraneous matters.” Aamot v. Kassel, 1 F.3d 441, 445 (6th Cir.1993); Manze v. State Farm Ins. Co., 817 F.2d 1062, 1066 (3rd Cir.1987); 9 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2363, at 259 (2d. ed. 1995) (“[U]nless formally converted into a motion for summary judgment under Rule 56, a motion to dismiss under Rule 12 does not terminate the right of dismissal by notice.“). See also David v. City and County of Denver, 101 F.3d 1344, 1352 (10th Cir. 1996); Anderson v. Angelone, 86 F.3d 932, 934 (9th Cir.1996). As the First Circuit recently explained:
[T]he proper approach to Rule 12(b)(6) conversion is functional rather than mechanical. A motion to dismiss is not automatically transformed into a motion for summary judgment simply because matters outside the pleadings are filed with, and not expressly rejected by, the district court. If the district court chooses to ignore the supplementary materials and determines the motion under the Rule 12(b)(6) standard, no conversion occurs.
Garita Hotel Ltd. Partnership v. Ponce Fed. Bank, 958 F.2d 15, 18-19 (1st Cir.1992) (collecting cases).
Finally, we note that, contrary to Norfolk‘s suggestion, no policy concerns mandate against the conclusion we reach here. It is true that Rule 41(a)(1) is “designed to permit a disengagement of the parties at the behest of the plaintiff only in the early stages of a suit, before the defendant has expended time and effort in the preparation of his case.” Armstrong v. Frostie Co., 453 F.2d 914, 916
Thus, although in Marex the plaintiff had been “dissembling, if not downright fraudulent,” and the defendant had expended considerable time and effort, we refused to hold that a Rule 41(a)(1)(i) voluntary dismissal was unavailable to the plaintiff. Id. Finley did not engage in activity comparable to that of the plaintiff in Marex, nor, prior to the filing of the Rule 41(a)(1)(i) notice, was Norfolk put to the effort demanded of the defendant in that case. Accordingly, Marex forecloses Norfolk‘s suggestion that equitable concerns require us to bend Rule 41(a)(1)(i) in this case.
Indeed, as the Sixth Circuit recently noted in considering this question, Norfolk‘s theory, “[p]ermitting a defendant, merely by appending to this Rule 12(b)(6) motion material ‘outside the pleadings,’ regardless of their scope, content or form, to abuse a plaintiff‘s right to voluntarily dismiss his action without prejudice, not only circumvents the plain language of the rule, but flies in the face of the ‘time and effort rationale.‘” Aamot, 1 F.3d at 444.
Rule 41(a)(1)(i) itself provides a defendant who wishes to “avoid wasting time or money” and “preclude future prejudice to its interests” with a simple remedy to prevent a plaintiff from sua sponte dismissing an action without prejudice: the defendant can file an answer or move for summary judgment. Id. See also Carter v. United States, 547 F.2d 258, 259 (5th Cir.1977). If a defendant fails to pursue this remedy, it cannot circumvent the rule simply by serving the plaintiff with a motion to dismiss, supported by extraneous materials. A plaintiff confronted with such a response is free to invoke Rule 41(a)(1)(i).
Accordingly, we reject Norfolk‘s theory. Instead we hold that a Rule 12(b)(6) motion to dismiss supported by extraneous materials cannot be regarded as one for summary judgment until the district court acts to convert the motion by indicating that it will not exclude from its consideration of the motion the supporting extraneous materials.
III.
The district court erred in vacating Finley‘s notice of voluntary dismissal. Accordingly, its judgment is
REVERSED.
DIANA GRIBBON MOTZ
UNITED STATES CIRCUIT JUDGE